National Bureau of Economic Research
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The National Bureau of Economic Research (NBER) is a US private, nonprofit research organization dedicated to studying the science and empirics of economics, especially the American economy. It is "committed to undertaking and disseminating unbiased economic research among public policymakers, business professionals, and the academic community."[1] It publishes NBER Working Papers and books. The NBER is located in Cambridge, Massachusetts with branch offices in Palo Alto, California, and New York City.
The NBER was founded in 1920. Its first staff economist and Director of Research was Wesley Mitchell. Simon Kuznets was working at the NBER when the U.S. government asked him to help organize a system of national accounts in 1930, which was the beginning of the official measurement of GDP and other related indices of economic activity. Due to its work on national accounts and business cycles, the NBER is well-known for providing start and end dates for recessions in the United States.
The NBER is the largest economics research organization in the United States[2]. Sixteen of the thirty-one American winners of the Nobel Prize in Economics have been NBER associates, as well as three of the past Chairmen of the Council of Economic Advisers, including the former NBER president, Martin Feldstein. NBER research is published by the University of Chicago Press.
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[edit] Notable members
[edit] Recession markers
The NBER uses a broader definition of a recession than do many economists. The traditional definition of a recession is two consecutive quarters of a shrinking gross domestic product (GDP).[3] In contrast, the NBER defines a recession as "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales."[4]. Dates of recessions are determined by identifying the date of the most recent peak in GDP to the most recent trough in GDP. The duration of this negative trend in GDP is the length of the recession. Dates of economic expansion can be similarly determined.[5]
The NBER prefers this method for a variety of reasons. First, they feel by measuring a wide range of economic factors, rather than just GDP, a more accurate assessment of the health of an economy can be gained. For instance, the NBER considers not only the product-side estimates like GDP, but also income-side estimates such as the gross domestic income (GDI). Second, since the NBER wishes to measure the duration of economic expansion and recession at a fine grain, they place emphasis on monthly rather than quarterly economic indicators. Finally, by using a looser definition, they can take into account the depth of decline in economic activity. For example, the NBER may declare not a recession simply because of two quarters of very slight negative growth, but rather an economic stagnation.[6]
Though not listed by the NBER, another factor in favor of this alternate definition is that a long term economic contraction may not always have two consecutive quarters of negative growth, as was the case in the recession following the bursting of the dot-com bubble.[7] For example, a repeated sequence of quarters with significant negative growth followed by a quarter of no or slight positive growth would not meet the traditional definition of a recession, even though the nation would be undergoing continuous economic decline.
[edit] References
- ^ http://www.nber.org/NBERnewpresident_release022008.html
- ^ http://www.politonomist.com/history-of-economic-recessions-00273/
- ^ http://www.bloomberg.com/invest//glossary/bfglosr.htm
- ^ http://www.nber.org/cycles.html
- ^ http://www.nber.org/cycles/recessions.html
- ^ http://www.nber.org/cycles/recessions_faq.html
- ^ http://www.nber.org/cycles/recessions_faq.html
